Few people by now can be unaware of Blackwater, later known as Blackwater Worldwide and now as Xe. The private security agency formed in 1997 and based in North Carolina is owned by Erik Prince, a former member of the US Navy Seal special forces, and has long-standing links with both the CIA and the FBI.

Its presence in Pakistan has been an open secret for some years. The investigative journalist and writer Jeremy Scahill, an authority on Blackwater and author of the bestselling Blackwater: the Rise of the World’s Most Powerful Mercenary Army, revealed last month that it has been there since 2006. He says Blackwater is being employed for covert ops, essentially intended to target high-value al Qa’eda leaders, including Osama bin Laden, but it has also assisted in providing information for drone attacks and has kidnapped suspects and transported them covertly to the US for interrogation.

In other words, it is an American agency with a licence to kill or kidnap, thus exonerating official American agencies that might one day be held accountable. (Although personally I doubt if the CIA will ever be held accountable. I continue to aver that it is the only real rogue intelligence agency in the world. Mossad might enjoy liberty of action for any operation, but it cannot undertake one without the approval of the Israeli prime minister: no such restriction applies to the CIA.)

Mr Scahill does not engage in speculation, and is not to be taken lightly. So when he states that Xe is sitting in Karachi, he is not likely to be wrong. He has added that the operation is so secret that many senior people in the Obama administration were unaware of it.

However, he seems to have erred in one respect: Xe is not only in Karachi. It also has a massive presence in Islamabad and Peshawar, where I understand the organisation has rented up to seven adjacent houses. Neighbours who heard muffled explosions soon after the houses were occupied suspect that they are linked by underground tunnels.

That the former president Pervez Musharraf permitted Blackwater entry to Pakistan does not surprise me in the least; he would have been ready to bark if George Bush wanted him to, not that Asif Ali Zardari is much different; both have been acceding to every US demand at every opportunity.

There is no doubt that for the past year or so US drone attacks have been far more successful in targeting militants than before, although, with the exception of Baitullah Mehsud, only in taking out low-level soldiers. My information is that the CIA/Xe have improved their human intelligence, and with its presence in Peshawar it is possible that Xe might have contributed to this improved performance of drone attacks.

But what else is it doing there? If its purpose is to kidnap suspected terrorists and convey them to the US, then clearly no one can know how many they have managed to extract since the operations would be covert; but, equally clearly, none has been high profile, or their disappearance would have been noted. All major non-Pashtun names on the US list of terrorists still roam at large in Karachi and Punjab.

If Xe is meant to target al Qa’eda, again they don’t seem to have had much success. The US secretary of state Hillary Clinton continues to assert that Osama bin Laden is in Pakistan, without offering concrete evidence; and if he is, why has the professional and highly paid Xe failed to kill or capture him? For such an expensive operation, Xe seems to have little to show to justify its continued presence in Pakistan.

The latest twist is that the organisation’s founder and owner, Mr Prince, has given an interview to the American magazine Vanity Fair, apparently in a fit of pique, in which he claims to have been a CIA asset since 2004 with a mission to hunt down and kill al Qa’eda militants for the US government. Describing the backlash after his employees shot dead 17 Iraqi civilians in Baghdad in 2007, Mr Prince said: “When it became politically expedient to do so, someone threw me under a bus.”

He now says he is severing all ties with Xe, and after the interview the CIA said it was cancelling all contracts with the organisation. Nevertheless, there appears to be no evidence of its impending departure from Pakistan. This is a security agency that is available to anyone who can afford it. If its contract has indeed been terminated by the CIA, what is it still doing in Pakistan? Either the “termination” was a farce for public consumption, or Xe has found other paymasters.

I am not a subscriber to conspiracy theories. However, sometimes there seems to be no alternative logical explanation, and/or the conspiracy theory appears logical in itself. When this happens, one is forced to become a believer. This seems to be one such instance.

Pakistan’s conspiracy theorists have long held that the real object of Xe, acting on behalf of the CIA, is to destabilise Pakistan so as to have an excuse to take over or destroy its nuclear assets, because Israel and the US remain uncomfortable with a nuclear Pakistan. I have long disputed this theory, but am finding it increasingly difficult to continue doing so.

The Brazilian journalist Pepe Escobar has suggested that the US wants to leave behind a united Pashtunistan, consisting of Pakistan’s North West Frontier Province and Afghanistan, an independent Balochistan and a weak, truncated Pakistan. The argument is a clever mix of fact and fiction; Jeremy Scahill he is not.

But then, what is Xe doing in Pakistan? All official statements from the US, Pakistan and Xe itself have denied its presence; but we all know it is there and, if my conclusions are correct, apparently serving no visibly useful purpose. All the denials can only give credence to one conspiracy theory or another: take your pick.

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